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U.S. firm's giant resort signals new phase in Macau gambling
(NYT36) UNDATED -- Aug. 27, 2007 -- MACAO-GAMBLING-RESORT-3 -- Illustration for use as desired with MACAO-GAMBLING-RESORT by keith Bradsher. (The New York Times)
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More from BusinessMACAU — Las Vegas' days as the capital of excess may be numbered.
The $2.4 billion Venetian Macau Resort, which opened Tuesday, will give Sin City more than a run for its money. The Venetian has more floor space than four Empire State Buildings. The hotel's slot machines, baccarat tables and other games of chance sprawl across a casino more than three times the size of the largest casino in Las Vegas. The 15,000-seat sports arena nearly rivals Madison Square Garden, the convention center has a 6,000-seat banquet hall and the luxury shopping mall has three indoor canals with singing gondoliers; the Venetian in Las Vegas has just one.
But what is most surprising about the 3,000-suite project is that it is merely the first of 14 interconnected hotels being built here by Las Vegas Sands Corp. When completed, the complex will include a St. Regis, a Shangri-la, a Raffles, a Conrad, an Intercontinental and a Sheraton, with their own casinos, bars and restaurants. And the project, which will cost $10 billion to $12 billion, is just the largest of a series of giant gambling complexes being constructed in Macau.
China is on its way to establishing itself as the global leader in a service industry: gambling.
Why? Money, naturally. When the Sands Macau, the first American-operated casino here, opened three years ago, first-year profits exceeded the total cost of the project, according to the company and industry analysts. Thanks to a national passion for gambling in mainland China, where it is illegal, Macau surged ahead of Las Vegas last year in total money gambled.
But some experts predict that while the gambling industry here will continue to grow, it may not expand as quickly as new casinos and hotels are set to open, resulting in narrower profit margins for the big American operators and for local companies as well.
"The margin will have to come down," particularly for operators of older casinos, said Gavin Ho, a gambling analyst at CLSA, an Asian investment bank. "I think some of the worse players will be driven out of business."
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